The document summarizes John Greene's presentation on how marketing can learn from the music industry's reinvention. Some key lessons are: (1) Products are becoming experiences; (2) Competitors include those changing customer expectations across industries; (3) Insights should provoke rather than just inform. The music industry survived digital disruption by shifting from selling products to experiences, recognizing a wider range of competitors, and inspiring customers through provocation rather than just information. These lessons can help other industries also adapt to digital disruption.

1. How the Re-Invention of the Music
Industry Can Inspire New
Approaches to Marketing Strategy
John Greene
Kellogg School of Management
September 14, 2014

2. Hello.

5. I believe the future of marketing
innovation can be inspired by the re-invention
of the music industry.

6. You want me to apply lessons
learned from the music industry?!?

7. Sometimes, re-invention
happens only when
there is no other option.

8. “For years, the record labels had a
business model that was consistent
and single-minded: (1) bundle
together a dozen songs on a CD, (2)
ship the discs out to retailers, and (3)
collect money. “

9. And then, suddenly, music could no
longer be sold like cereal.

11. The scary news:
Every industry
has a Napster.

12. The better news:
You can be the
Napster.

13. Through a decade of
collapse, innovators within
the music industry have
had to re-invent their
approach to everything.

14. And the re-invention in the music
industry illuminates new ways of
looking at three fundamental
questions that can help any industry
stay ahead of their Napster.
What do we
really sell?
Who are our true
competitors?
How do we
inspire our
customers?

15. TODAY’S AGENDA
What do we
really sell?
Who are our true
competitors?
How do we
inspire our
customers?
Pharrell’s “Happy"
and How to Design
Hit Brand
Experiences
Avicii, Aloe Blacc,
and The Age of
Liquid
Expectations
Beats by Dre,
Emily Dickinson,
and the End of
Insights

16. #1: What do we really sell?
Pharrell’s “Happy” and How to
Design Hit Brand Experiences

17. #1: What do we
really sell?

18. “We rent DVDs.”

19. “We sell film.”

20. “We sell newspapers.”

21. Products in any
industry can be
quickly and
devastatingly
Napster-ed.

22. “Customers don’t buy
hammers. They buy a
beautifully hung picture
on their wall.”

23. $0.05 $5.00

24. Shift #1:
Products Experiences

25. “In the past, people would tour to
sell their albums; today they put
out albums to promote their tours.
The pendulum has swung.”
- Guy Oseary,
Madonna’s manager

26. It turns out that a hefty number of “MDNA” albums
weren’t sold the usual way.
For every ticket sold online to Madonna’s upcoming
shows, purchasers automatically receive a copy of
“MDNA.” They get a link to a free purchase on
ITunes, or they can send in their mailing address
for a physical CD. It doesn’t matter if the concert
ticket is $52 or $350.

27. "I foresee a marked
deterioration in American
music and musical taste, an
interruption in the musical
development of the country,
and a host of other injuries to
music in its artistic
manifestations, by virtue -- or
rather by vice -- of the
multiplication of the various
music-reproducing
machines."... The player piano
and the gramophone strip life
from real, human, soulful live
performances.”
- John Philip Sousa, 1906
In partnership with McSweeny's,
Beck's forthcoming Song
Reader will be "an experiment
in what the album can be at the
end of 2012," there will be no
CD, no LP, no mp3. Just the
sheet music, ready to be
performed by anyone willing.

28. What can Pharrell’s “Happy”
teach us about designing
contemporary brand
experiences?

29. “We should consider every day lost on
which we have not danced at least once.”
- Friedrich Nietzsche
Yes, that Nietzsche.
That’s how powerful dance is.

30. “Danceable grooves have just the
right amount of gaps or breaks in
the beats. Your brain wants to fill
in those gaps with body
movement.”
- Maria Witek, Arhaus University in Denmark

31. Witek says that people all over the world
agreed on which drum patterns made
them most want to dance:
“Not the ones that have very little complexity
and not the ones that had very, very high
complexity… but the balance between
predictability and complexity.”

32. Designing hit brand experiences:
Molecules, Gaps, and the Right
Amount of Surprise

33. Think of your brand experience as a
molecule of experiences from your
customer’s perspective.

37. The Challenge:
Only 1 in 3 young adults
between the ages 21-27
have ever tasted
Budweiser.

38. You’re not selling liquid.
You’re a catalyst for a
social experience.

40. “Makers of Tomorrow”
TV Spot Premieres During
Olympics Opening Ceremony
Celebrating the New Americana that is
being created each and every day.
Print Ads
Made In Parties
in Local Markets
Teaser Video on
Life + Times
On-Premise Promotion
Instagram Flag Mosaic
30 Artists Perform
on 4 Stages
Project 12
Local Brewery Feature
Made In America
Merchandise
Live Mural Painting
Over 1.3 Million Festival
R/W/B Project
for Young Artists
Mobile App
Live FanCam
Live Streams
MadeInAmericaFest.com
Commemorative
Budweiser Bottles
Over 600 Million Earned
PR Impressions
Forthcoming Documentary
from Ron Howard
Proceeds to the
United Way

41. “MAKERS OF TOMORROW” TVC
1500% increase in Budweiser Social Conversation
TOTAL FESTIVAL ATTENDANCE
90,000+
TOTAL LIVE STREAMS
1,310,256 (Goal was 500,000)
TOTAL MEDIA IMPRESSIONS
Over 2 Billion
NEW FACEBOOK FANS
Over 1.19 Million (238% above goal)
UNITED WAY DONATION
$700,000 to Local Philadelphia Chapter
Celebrating the New Americana that is
being created each and every day.

42. From products to
experiences
Start with your mission.
Design the molecule that includes
everything your customers experience;
not just those that you directly create/sell.
Leave the right gaps for your customers to
fill in on their own.

43. Exercise #1: Brand Molecule
Start with your mission.
Identify the core pillars of the customer experience.
Array their product offering off of the pillars of the experience.
Identify opportunities for product expansion: new audiences and
need states where they have yet to scale off of the core pillars of
the experience.

44. Start with the Mission

45. Identify the Core Pillars of Your Customer Experience
(feel free to add more)

46. Scale Products off of Your Core Experiences
(feel free to add more)

47. Identify New Audiences and Moments of Need
(feel free
to add
more)

48. And, Importantly, Identify Opportunities for Growth
What Other Consumer Markets
Need to Have Movement Evolved?
What are other ways to create
products/revenue streams off of
the core pillars of the customer
experience?
What Other Consumer Moments
Need to Have Movement Evolved?

49. 15 Minute Team Exercise: My Take

50. Start with the Mission
evolving
the
way
the
world
moves

51. Identify the Core Pillars of Your Customer Experience
Real-Time
Tracking
evolving
the
way
the
world
moves
On-Demand
Invisible
Payments

52. Scale Products off of Your Core Experiences
Real-Time
Tracking
evolving
the
way
the
world
moves
UberBlack
On-Demand
UberX
Invisible
Payments
Uber Taxi
Uber Rush

53. Identify New Audiences and Moments of Need
evolving
the
way
the
world
moves
Uber
Chopper
UberBlack
On-Demand
UberX
Uber Family
Real-Time
Tracking
Invisible
Payments
Uber Taxi
Uber Rush
Whimsical
Deliveries
Ice Cream
Delivery
Kittens

54. And, Importantly, Identify Opportunities for Growth
evolving
the
way
the
world
moves
Uber
Chopper
UberBlack
On-Demand
UberX
Uber Family
Real-Time
Tracking
Invisible
Payments
Uber Taxi
Uber Rush
Whimsical
Deliveries
Ice Cream
Delivery
Kittens
What Other Consumer Markets
Need to Have Movement Evolved?
Why Not License the Software
Experience (eg, Amazon Cloud
Storage)?
What Other Consumer Moments
Need to Have Movement Evolved?

55. #2: Who are our true competitors?
Avicii, Aloe Blacc, and The Age of
Liquid Expectations

56. “Avicii Unveils Bizarrely Twangy Mumford
& Sons Reinvention During Ultra Set.”
“EDM Superstar Avicii Makes a Kazoo-Heavy
Kinda-Country Record.”
“Hey, you got your bluegrass in my techno!”

58. #2: Who are our
true competitors?

59. Business breeds
us to be fighters.

60. Direct Competitors
Original iPhone Launch

61. But often it’s not the
competitor right in
front of us that we
should be most
worried about.

62. Experiential Competitors

63. Experiential Competitors

64. Customer expectations are
becoming increasingly liquid
across every category.

65. Perceptual Competitors

68. Shift #2:
Static
Expectations
Liquid
Expectations

69. The Age of Liquid
Expectations
Direct They sell products that compete
with ours.
Experiential
They sell experiences that
replace ours.
Perceptual They change the expectations our
customers have for us.

70. Team Exercise #2:
Liquid Expectations
Direct
Experiential
Perceptual

71. Team Exercise #2
Direct What competitors sell products/
services that compete with Uber?
Experiential
What competitors offer
experiences that are threatened
by Uber?
Perceptual How does Uber change the
expectations that consumers have
for brands in other industries?

72. Direct

73. Direct
Experiential

74. Direct
Experiential
Perceptual

75. Team Exercise #2
My Take

76. Direct
For Londoners and tourists
alike, Wednesday was a
headache-inducing travel
day in the city. In a new
show of solidarity and
anger against the taxi app
Uber, around 12,000
London cab drivers
suspended their service
and took to the streets.

77. Direct

78. Direct

79. Experiential
"We get customer feedback
everyday saying, 'Hey I just
sold my car; I don't need to
pay for parking at home or
work.' Lets say that's $500 a
month for both. We just saved
them $6,000 a year. ... I think
that's why so many people are
using Uber and getting rid of
their cars."
- Travis Kalanick
Direct

80. Direct
Experiential
Perceptual
Uber has made payments
invisible by making the entire
checkout experience, well,
invisible. Getting out of the
taxicab is the equivalent of
checking out of the taxi, with
payment automatically
triggered at that moment. The
overall experience is
predictable and hassle-free.

81. Direct
Experiential
Perceptual
Uber has made payments
invisible by making the entire
checkout experience, well,
invisible. Getting out of the
taxicab is the equivalent of
checking out of the taxi, with
payment automatically
triggered at that moment. The
overall experience is
predictable and hassle-free.

82. Direct Black car companies, taxi drivers,
delivery companies
Experiential The Auto Industry
Perceptual Anyone who connects people to a
service, anyone in the payments
industry…

83. #3: How do we inspire our customers?
Beats by Dre, Emily Dickinson, and
the End of Insights as We Knew Them

84. What can a 19th
Century poet teach us
about how to inspire
customers?

85. “Tell all the truth but tell it slant
Success in Circuit lies
Too bright for our infirm Delight
The Truth's superb surprise
As Lightning to the Children eased
With explanation kind
The Truth must dazzle gradually
Or every man be blind – “
Emily Dickinson

86. “Tell all the truth…
But tell it slant”
Success in Circuit lies
Too bright for our infirm Delight
The Truth's superb surprise
As Lightning to the Children eased
With explanation kind
The Truth must dazzle gradually
Or every man be blind --
Emily Dickinson

87. “TELL ALL THE TRUTH…
But tell it slant”
Success in Circuit lies
Too bright for our infirm Delight
The Truth's superb surprise
As Lightning to the Children eased
With explanation kind
The Truth must dazzle gradually
Or every man be blind --
Emily Dickinson

88. REAL > ACCURATE

89. ACCURATE: Laps/Can has risen among
passives, slowing raw/new
growth for State Farm.

90. REAL: Too many people see insurance as
more or less the same, so why not get a
lower price.
90

91. 18
17
16
15
ACCURATE: Budweiser is losing market
14
13
12
11
10
share amongst their most
important market segment.
21-­‐27
Years
28-­‐34
Years
35-­‐49
Years
50-­‐65
Years

92. REAL: Budweiser is a relic of Norman
Rockwell’s Americana.
92

93. ACCURATE: Sales of the Big Mac have
steadily slipped, especially
among young adults.

94. REAL: Once a cultural icon, the Big Mac is
invisible in plain sight.

95. “Tell all the truth…
But tell it slant”
Success in Circuit lies
Too bright for our infirm Delight
The Truth's superb surprise
As Lightning to the Children eased
With explanation kind
The Truth must dazzle gradually
Or every man be blind --
Emily Dickinson
95

96. If you had to choose, would you
rather be interesting or right?

97. “If I were President of the United
States, I would rather be right than
interesting. If I were a CEO of a
company, I would rather be right
than interesting. But I am a
journalist–
what journalist would rather be
right than interesting?”
- Malcolm Gladwell

98. TRUTH + SLANT

99. Insight Provocation
“YOUR STUFF IS COVERED…
BUT ARE YOU?”
PEOPLE PROTECT YOU IN A
WAY THAT A 1-800
NUMBER CANNOT

101. Insight Provocation
“IT’S ONLY WEIRD IF
IT DOESN’T WORK.”
NFL FANS TRULY BELIEVE
THEIR ACTIONS AFFECT THE
OUTCOME OF A GAME

103. Insight Provocation
“DON’T TRY TO OUT-THINK
YOUR TASTE BUDS.”
TRY AS YOU MAY, YOU
CAN’T QUITE EXPLAIN WHY
YOU LOVE A BIG MAC

105. Shift #3:
Insights Provocations

106. "You listen to Apocalypse Now (on
iPhone headphones), and the
helicopter sounds like a mosquito."
- Jimmy Iovine

107. Insight
A generation missing out on audio fidelity.
But that’s not the real story.

108. Insight Provocation
A generation missing
out on audio fidelity.
It’s better to look good
than sound good.

109. The Fidelity Era The Fashion Era
(Insight) (Provocation)

110. What do we
really sell?
Who are our true
competitors?
How do we
inspire our
customers?
Staying ahead of
Your Napster
Products Experiences Static
Expectations
Liquid
Expectations Insights Provocations

111. Why the Apple/
Beats Deal Should
Terrify CMOs from
Every Industry

112. The Age of Liquid
Expectations
Direct Terrestrial Radio, What’s left of the
CD industry, Spotify, etc.
Experiential
Where are you spending time
now that Apple/Beats steals?
Perceptual Why isn’t everything that I enjoy
delivered with trusted,
contextually-aware curation?

114. “The national TV Guide's
first issue was released
on April 3, 1953.”
Why are you still
watching TV that way?

115. “Music, we
realized, sells
everything but
music.”
- Troy Carter

116. How will you stay ahead of this Napster?
+
+
+

117. Thank you.
JohnGreene60614@gmail.com
www.aboutjohngreene.com
http://thennowsoon.wordpress.com